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Oil & Gas Sector of

Pakistan
Presenters :
• Muneeba Zafar
• Fahad Kamran
• Sana Abbas
Pakistan Primary Energy Mix YR-
2001
Consumption: 44.5 Million TOE

• Oil : 43.5 %
• Gas : 41.5 %
• Hydro: 9.2 %
• Coal: 4.5 %
• Nuclear: 1 %
• LPG: 0.3 %
Pakistan Primary Energy Mix YR-
2006

 In Yr01 – Oil 43.5 % & Gas 41.5 %


Global and Regional
Comparison.
World Oil Reserves
 Total world oil reserves are approximately 1,081 to
1,293 billion barrels (2005)

 Pakistan: 342 million barrels = 0.03% of


world (2005)
World Oil Supply
Total world’s supply 75 million barrels/day (2005)

Pakistan: 63,000 Barrels per day i.e 0.063 mb/d.


Which is 0.08% of world. (2005)
Oil Consumption

 Total Consumption of world : 73.9 million


barrels per day. (2004)

 Consumption of Pakistan: 0.386 mb/d =


0.52% of world (2004)
Pakistan’s Oil Consumption
Pattern. (2006)
Domestic
2% Other/Govt
2%
Industry
10%

Agriculture
1% Power
35%

Transport
50%
World Gas Reserves
 Total Reserves: 5,304 trillion cu ft. (2004)

 Pakistan: 24 tcf = 0.45% of world (2004)


World’s Gas supply and
consumption (2003-04)
 Total world supply : 234 billion cu. Ft per
day.

Pakistan: 2.4 bcfd = 1.0% of world

 Total world Consumption: 232 billion cu


ft.per day

Pakistan: 2.2 bcfd = 0.94% of world


Pakistan’s Gas Consumption
Pattern.(2006)
Industries
(excluding
fertilizer)
17% Commercial
23%

Fertilizer
15%

Domestic
15%

Transport
Power 4%
26%
Pakistan Oil & Gas
Resources
and Infrastructure
Exploration of Oil & Gas (2006)

 First exploration well - 1866


 First oil discovery - 1915
 Total exploratory wells drilled - 653
 Total discoveries - 185
 Success rate - 1 : 3.5
 Sedimentary basin area - 827,268 sq km
Oil & Gas Reserves (2003-04)
Oil Natural Gas
(Million (Trillion
barrels) cubic feet)
 Discovered 737 38
 Produced 441 14
 Remaining 296 24
Oil/Gas/LPG Demand & Production(2003-04)

 Oil (b/d) 386,000 58,000 328,000

Imports

 Gas (bcf/d) 2.9 2.4 0.5

Unsatisfied
demand

 LPG (t/d) 1,200 857 343


Unsatisfied
demand
Supply & Demand of Oil (2003-04)
 Demand 19mt/y
 Supply
Local Products 08.7mt/y
Imported Products 10 mt/y
Imported Crude 143,683 b/d
($ 1.362m)
Annual Import Bill $ 3,326m
Oil Refining Capacities
(Million Tonnes
per Year)


Existing Under Installation
 ARL 1.66 Bosicor 1.2
 PRL 2.20
 NRL 2.80 Proposed
 Dhodak 0.12 Iran Pak 6.0
 PARCO 4.50

 Total: 11.28
Pakistan Natural Gas Network

(Km)

Northern Southern
System System Total

Transmission Lines 5,000 3,000 8,000


Distribution Lines 32,000 21,000 53,000
No. of consumers 2.0 m 1.6 m 3.6 m

Final Gas Consumed 984 1,020 2,004


(MMCFD)
A Road Map to an
Efficient
Oil & Gas Sector
Road Map to an Efficient
Oil & Gas Sector

 Liberalize Oil & Gas Sector


 Privatize Public Sector Entities
 Accelerate Gas Development
 Improve Governance
 Promote Foreign Investment
 Improve Environment
A. Liberalize Oil & Gas Sector
 Shift from cost-plus to competitive regime.
 Full commercial and operational authority
to Board of Directors of public sector
entities.
 Deregulation of petroleum prices,
discontinuation of the freight pool, review
of marketing and dealer margins, etc.

Cont.
A. Liberalize Oil & Gas Sector
(Contd.)
 Review pricing and taxation of oil and
gas to allow consumers to benefit
from reductions in international prices
and to adjust to higher prices.
 Liberalize oil imports.
 Rationalize gas retail pricing, link
consumer price with substitute fuels.
B. Privatize Public Sector Entities

 Disinvest GOP / public sector


shareholding in discovered fields and
companies.
Privatize
 PPL
 OGDCL
 PSO
 NRL
C. Accelerate Gas Development
 Fast-track exploration and
exploitation of domestic natural gas
resources .
 Increase domestic supply of LPG
from refineries and fields .
 Import natural gas through pipeline
from neighboring countries and LPG
through a new import terminal.
C. Gas Imports

 Gas Imports: Replacement of imported oil


with imported gas will increase energy
security both in terms of security of supply
as well as security of price.
 The recent proposal from Qatar to bring
gas exclusively to Pakistan, as well as the
Iranian proposal which considers India as
an essential component, could be
considered.
C. Benefits of Gas Import
 The import of natural gas will provide multi-
directional benefits to Pakistan as well as the
South Asia region:

 Benefits to Pakistan:
• Substitution of imported liquid fuels (fuel oil and
kerosene oil), saving foreign exchange and the
environment.
• Relief to the hard-pressed infrastructure of
ports, roads and railways used in movement of
imported oil upcountry.
• Political advantage as a transit country.
C. Benefits of Gas Import (cont.)
 Advantages to Region:

 Shift towards gas-driven environment friendly energy


economies.

 Strengthen regional cooperation and provide a foundation


for future economic growth throughout the region.

 Significant direct and indirect economic benefits during the


construction and over the life of the project through
employment, transit fees, availability of clean fuel, economic
and industrial growth.

 New business and investment opportunities.


C. POTENTIAL GAS IMPORT SOURCE COUNTRIES
(2003-04)
Iran

 Proven Reserves - 812 TCF


Production -1900 BCF
Export -

Turkmenistan

 Proven Reserves -101 TCF


Production -790 BCF
Export - 590 BCF

Qatar

 Proven Reserves - 300 TCF


Production - 690 BCF
Export -168 BCF
D. Improve Governance
 GRA (Gas Regularity Authority) and
OGRA (Oil Gas Regularity Authority),
established.
 HOLDCO operational.
 Department of Petroleum and Energy
Resources being restructured to
perform policy formulation and
coordination functions.
E. Promote Foreign Investment

 Investor friendly “Petroleum Exploration and


Production Policy 2001” announced in May
2001
• Investment of US$ 978 million has been committed
since October 1999 which includes:
• Exploration US$ 73 million
• Gas Fields Development US$ 505 million
• Oil Pipelines US$ 278 million
• Marketing US$ 55 million
• Local Investment US$ 67 million
F. Improve Environment
 Increasing natural gas use to replace
fuel oil in power generation, and
petrol/diesel in transport by CNG
 Doubling the availability of LPG
 Improving petrol and diesel oil
specifications
Some Options for
Pakistan’s
Energy Sector
Oil & Gas

 Total potential estimated at about 27


billion barrels of oil and 282 trillion cubic
feet of gas.
 Only 737 million barrels of oil and 38
trillion cubic feet of gas have so far been
discovered.
 Major future discoveries of oil and gas will
come from the offshore, Balochistan and
Dumber Block of Kirthar.
Shift to Gas
A shift to gas is the least cost and
preferred option for:
• Economic Benefits
• Security of Energy Supplies
• Societal Equity
• Environmental Improvement
• Strategic Regional Cooperation
Compressed Natural Gas (CNG)
 After successful introduction of
natural gas as transport fuel to
replace petrol, policy actions are
being formulated to promote large
scale replacement of diesel oil by
CNG.
Oil Refining and Infrastructure
 Options be evaluated of putting up
new refineries by value addition of
the existing refineries if the energy
mix ratio of oil to gas (presently
about 60/40) is to shift in favor of
gas to say 70/30 or 80/20.
Coal (2003-04)

 Thar field is the 5th largest (185 billion


tonnes) coal field in the world but has
remained un-exploited.
 Current production of coal 3.5 million
tonnes per year, constituting less than 5%
of our present energy mix.
 Coal must come into immediate focus for
power generation, and industrial,
commercial and domestic use.
COAL CONSUMPTION PATTERN OF PAKISTAN

Cement
20%

Power
4%
BrickKilns
53%

Coke
23%
Coal Reserves & Production
In
Million Tonnes

 Province Reserves Annual


Production

Sindh 184,123 0.978


Punjab 256 0.400
Balochistan 196 1.673
NWFP 81 0.041
-----------------------------------------------
Total: 184,656 3.092
Strategy to Increase Coal Use
 Policy Statement:
- Share of indigenous coal in energy mix at
national level to be enhanced from present
4.5% to 20%
Long Term Measures:
- Secure private investment for exploitation
of Thar.
- Feasibility studies to establish coal based
thermal power plant

(Contd..)
 Immediate Measures:
- Conversion of processing industry on coal
through policy incentives.
- Study utilization of coal for town gas.
- Study in-situ gasification of Thar coal fields.
- Preparation of mining feasibility study on
Thar coal.
 - Provincial Government to develop
infrastructure in coal fields .
Enviromental Issues:
 Damages to the environment, can either
be knowingly or unintentionally.

 Directly effect on human life in the


region.

 Oil’s spill over effect.

 Air emission.
Enviromental Issues: (contd.)
 Liquid waste.

 Soil contamination.

 Extinction of plants and species.


WTO Effect :
Pakistan will be benefiting from the
implementation of WTO.
 Free trade of oil and gas.
 Beneficial for Pakistan as it is heavily
dependent on oil and gas import.
 Reduction in cost of products.
 Change in infrastructure by import of
technological goods.
The End

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